SINGAPORE - On Friday, Singtel revealed Hooq, its new video-streaming service which will target Asian markets, starting with India, Indonesia, Thailand and the Philippines.
The partnership between the telco (which owns 65 per cent of the joint venture) and Sony Pictures and Warner Brothers seems to be targeting emerging markets with large populations, and where Singtel already has a stake in the local telcos there.
Singapore is conspicuous by its absence from the list; as is Australia, where Netflix is rolling out its service next month.
Although Singtel said in its press release that the service will be available on a customer's "device or platform of choice", mobile users appear to be its chief target. There are two reasons for this.
First, the launch countries generally have better mobile network coverage than fixed broadband coverage. Second, Singtel already has an indirect billing relationship with mobile users in the four launch countries through its partners - India's Bharti Airtel, Indonesia's Telkomsel, Thailand's AIS and Philippines' Globe.
Also, the mobile data networks in these markets are relatively uncongested as smartphone penetration is still low. So, even though mobile data speeds might be slower than in countries such as Singapore, the high availability of mobile bandwidth may make smooth streaming possible.
Success will not come easy.
A huge challenge is rampant content piracy.Singtel may be able to offer content at a low price, but in developing nations where "free" has become the norm, it will be an uphill task to convince users to pay anything at all.
The only hope may lie in Singtel's ability to convince its mobile partners to allow bundling of a video-streaming service with mobile subscription plans.
There has also been talk of how Hooq might well be a competitor to Netflix in Asia. Personally, I have my doubts. With only two of the big six Hollywood movie studios in hand, Hooq has a long way to go to convince existing Netflix users like me to add another over-the-top (OTT) service to my list.
Without Disney, Universal, Paramount and Fox, Hooq users can expect to miss out on Marvel and upcoming Star Wars content (Disney), Fast And Furious shows (Universal), Star Trek and Transformers (Paramount) and many more.
Other OTT services, such as Netflix and Amazon, are increasingly seeing the rising popularity of original programming, such as House Of Cards and Breaking Bad.
It is unlikely that Singtel will have the capability or the business will to push out its own originals, at least not in the early years.
Singtel's hopes may well lie in how successfully it can get local content in markets where it can secure content rights without breaking the bank.
My greater concern is with the impending arrival of Netflix into Asia Pacific, starting with Australia and New Zealand.
Will Netflix start blocking subscribers like me who access the Netflix US service through virtual private network services?
It is not the subscription cost that worries me. I have faithfully paid US$8 (S$10.80) every month to Netflix for the last two years. But I fear that a local version, should it ever arrive here, will be a watered-down version of Netflix US, with significantly less content.
This is because Netflix, or any service provider for that matter, will find it a challenge to win content rights in countries in this region, where local pay-TV providers have already signed up rights to much of Hollywood's content.
As for Singtel, it might well try to become the Netflix of Asia but, for now, I am certain that any success it enjoys will be limited to the mobile platforms in emerging markets.
This article was first published on Feb 04, 2015.
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